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https://scmp.com/business/banking-finance/article/2095026/us-dollar-worst-trading-week-year-trumps-political-woes Banking & Finance
US dollar in worst trading week in a year as Trump’s political woes hound greenback
Pedestrians walk past a quotation board flashing the current foreign exchange rate gainst the US dollar in front of a securities company in Tokyo. The US dollar had its worst trading week due to the political issues houding US President Donald Trump. Photo: AFP
The US dollar fell on Friday, for its worst week since April 2016 against a basket of major currencies, having surrendered the gains made since Donald Trump was elected US president.
The dollar index, which tracks the greenback against a basket of six world currencies, has shed more than 2 per cent this week. On Friday, it fell 0.75 per cent, hitting its lowest since November 9, the day after the US election.
Uproar over Trump’s recent firing of FBI Director James Comey, who was overseeing an investigation into possible links between the president’s team and Russia, has pressured the dollar.
“The dollar overall, across the board, has been getting beat up this week and a lot of that has to do with the political risk here in DC,” said John Doyle, director of markets at Tempus Inc in Washington. “While we saw a little bit of a reprieve yesterday (Thursday), we’re right back on that dollar weakness train.”
The US currency has also suffered from a resurgent euro, which has the largest weighting in the dollar index. The single currency has gained more than 2.5 per cent this week, headed for its best performance since February 2016. It rose 0.95 per cent on Friday to a six-month high of US$1.1205.
The advance of the euro was spurred by a possible winding down of the European Central Bank’s expansive monetary stimulus programme, said analysts, with recent data pointing to a robust recovery in the euro zone.
Against the safe-haven Swiss franc, the dollar fell 0.45 per cent, touching a six-month low. It was on track for its largest weekly percentage fall since February 2016.
The dollar fell 0.3 per cent against the yen to 111.14 and had its first weekly drop in five against the Japanese currency.
A man stands next to a board displaying the exchange rate of the Mexican peso against the US dollar. The greenback had its worst trading week due to the political problems of US President Donald Trump. Photo: Reuters
The dollar moved broadly lower after a report that a senior White House adviser is a person of interest in the investigation into possible coordination between the Trump campaign and Russia.
The greenback also sank against emerging market currencies, which were dragged lower on Thursday by news that Brazilian President Michel Temer had been recorded offering bribes to silence testimony by a potential witness in the country’s wide-ranging corruption probe.
The dollar fell 3.3 per cent against the Brazilian real .
Oil-linked emerging market currencies like the Mexican and Colombian pesos and the Russian rouble gained around 1 per cent versus the dollar, also boosted by a rise in oil prices.